CALIFORNIA BUDGET –

In my ongoing attempt to keep you informed about The California State University systemwide issues, I wanted to take this opportunity to share the news on some important budget developments.

After months of protracted negotiations, the California Legislature has finally reached agreement on a 2003/04 state budget. The new budget calls for deep cuts at the CSU, for a total net reduction of approximately $345million, or about 13 percent of the CSU's $2.6 billion General Fund budget.

The CSU had anticipated deep cuts and had been planning for many months to manage these reductions with the least possible impact to students and employees. We made such cuts as eliminating or freezing 2,300 vacant positions, freezing salaries for management employees and executives, and reducing the Chancellor's Office budget by $4.5 million. Additionally, at the July Board of Trustees meeting, our trustees made the difficult decisionto raise graduate and undergraduate systemwide student fees by 30 percent.

However, the new budget reflects cuts that were even deeper than we had expected. It also carries a stark message about the future of access at California's public universities. The new budget cuts will mean that the CSU must limit enrollment growth to only 4.3 percent instead of the 7 percent anticipated for 2003/04. Additionally, the budget language calls for zero enrollment growth at the CSU and the University of California for 2004/05.

With these new limits, our state lawmakers have essentially told us that we need to place restrictions on our long-cherished promise of providing educational opportunity to all eligible California students. This policy change creates a near-term challenge for the CSU in that many of our campuses will be limiting or cutting off enrollment for the spring session. For the long term, it means that our state must reform its higher education financing structure in a way that allows us to provide access to a qualityeducation in good economic times and bad.

Over the next several months, the CSU campus presidents and I will be examining ways to manage this situation while maintaining academic quality at our institutions. I will write to you again after the fall term has begun to share any more budget news that may have emerged and to bring you up to date on our progress. In the meantime, I want to thank you again for your cooperation during these months of budget uncertainty, and for all that you do for the California State University. I wish you all a safe and enjoyable summer.